For this review, we will look at a political rows, the views of some economic organisations, and then what the trade websites focused on for this Budget.
Politics first. (Feel free to skip ahead)
We are at a phase of the Budget process where the Chancellor is being accused of lying. That comes about because she gave a very, very strong hint about tax rises, which were then ruled out. This, it seems, came about when Rachel Reeves had already received new figures from the Office for Budget Responsibility suggesting a little more fiscal headroom.
Your reviewer is simply not convinced about this line of attack – but in any case Reeves is denying this in an interview with the BBC’s Laura Kneussberg and reported in the Guardian.
The Telegraph reports on all the times Reeves 'lied' about the black hole. That, I think, is a very different proposition and criticism than the idea there was some attempt to make the Budget feel less painful but pretending it was going to be worse.
It feels very difficult to see what benefit the Chancellor could really have from strongly suggesting tax rate rises and then not bringing them in. The threshold freeze is bad enough.
Amid the rows, the Observer suggests huge tension between the political teams and the economics teams in Downing Street and this feels like a less hysterical analysis, though it does also reveal an unholy mess as the centre of government.
As advisers saw, the whole Budget process was dreadful and unprofessional. The tax rises including on business are not in keeping with the growth agenda, the pension change with the reform agenda for pensions, but the accusations of lying feel a bit much.
It may be the left wing Guardian that hints at the real risk to the Government. Here, columnist John Harris suggests what may actually come to haunt Labour – that the squeezed middle is getting squeezed too much.
Anyway, away from the politics we are going to briefly tour the views of the Office for Budget Responsibility, the Institute for Fiscal Studies and a left tending thinktank the Resolution Foundation, which still makes for uncomfortalbe reading.
From the OBR - low growth
We expect average GDP growth of 1½ per cent over the next five years, 0.3 percentage points slower than in March. Lower GDP growth coupled with higher forecast inflation, wages, receipts, and spending results in a modest deterioration in the pre-measures fiscal position, with borrowing £6 billion higher and the current surplus reduced to £4 billion in 2029-30. Against this backdrop, the Budget delivers a frontloaded increase in spending of £9 billion and backloaded increase in taxes of £26 billion. This doubles the current surplus to £22 billion in 2029-30 but also leaves debt 2 per cent of GDP higher than in March.
From the IFS - tax rises not seen for 50 years.
The overall tax burden is forecast to increase from 36.3% of GDP in 2025–26 to 38.3% in 2030–31. If an election were held tomorrow, the overall tax rises announced in this parliament would exceed those announced in any other since at least 1970.
From the Resolution Foundation - typical workers less well off
The biggest revenue raiser is a further three-year personal tax threshold freeze, which will cost the typical worker £220 a year. Most workers will be worse off than if the Chancellor had raised income tax by 1p instead.
Now we tour the trade magazines headlines.
Professional Adviser speaks to advisers who are welcoming the cut in the cash ISA limit, but some want more education.
In FTAdviser, IFAs are questioning why Hargreaves Lansdown got a ‘shout out’ in the Budget speech for potentially helping shift ISA savers.
IFA Magazine focuses on the 2% rise in tax on basic and higher rate dividends from April next year quoting Evelyn's Jason Hollands saying: “‘These hikes seem to be aimed mainly at extracting more cash from the UK’s small business owners, who don’t have the option of owning their company shares in a tax efficient Individual Savings Account. It will be felt by entrepreneurs as a kick in the teeth, as it takes guts to set up a small business and cash-flow can be uneven and profits uncertain, especially in the current environment where the economy is struggling.”
Financial Reporter notes the Government has signalled that those relying solely on the state pension will not have to pay income tax.
Money Marketing reports on a the welcome absence of one Budget measure with explanatory headline “Chancellor swerves ‘own goal’ tax-free cash chaos”. Well. Quite.
FTAdviser reports on the fact that the £1million allowance for the 100 per cent rate of agricultural property relief and business property relief will be transferable between spouses and civil partners, so effectively becomes £2m for many families.
Professional Pensions was fast out with its coverage of 2029’s salary sacrifice changes, helped by careless email from the OBR.
Citywire New Model Adviser quotes some advisers saying salary sacrifice was too good to be true.
Corporate Adviser suggests that larger employers could be losing £1.5million a year due to the salary sacrifice changes, but they are a long way away.
Healthcare & Protection reports on a complex administrative decision involving IHT and pensions.
“As part of Budget 2025, HM Treasury committed to enabling personal representatives to direct pension scheme administrators to withhold 50% of taxable benefits for up to 15 months and pay inheritance tax (IHT) due in certain circumstances,” it reports.
Investment Week says the VCT sector has been blindsided by the Budget changes reporting that the industry has called for an urgent rethink of Chancellor Rachel Reeves' plans to cut upfront income tax relief for VCTs from 30% to 20% as of April 2026, amid concerns about a hit to fundraising.
In a broader piece, Investment Week adds that markets are likely to stay uneasy with the direction of government policy.
Mortgage Strategy suggests that the introduction of a 'mansion tax' is likely to trigger mass valuation appeals by the owners of impacted properties.
The new high-value council tax surcharge (HVCTS) is set to target properties worth more than £2 million, following revaluation of properties in bands F to H by the Valuation Office though it is a surcharge so it's on top of council tax not part of it.
With the news of the abolition of the Lifetime ISA in its current form, Mortgage Solutions is suggesting what its ‘simpler’ replacement should look like, addressing fixed penalties, price caps and protecting self-employed savers.
